Essay Series Can the deliver for working people?

John Cryer MP Billy Hayes Carolyn Jones Jonathan Michie Clare Moody Claude Moraes MEP

April 2014 Authors

John Cryer MP John is the Labour Member of Parliament for Leyton and Wanstead.

Billy Hayes Billy is the General Secretary of the Communication Workers’ Union (CWU).

Carolyn Jones Carolyn is Director of the Institute of Employment Rights (IER).

Professor Jonathan Michie Jonathan is Professor of Innovation & Knowledge Exchange at the University of Oxford, where he is Director of the Department for Continuing Education and President of Kellogg College.

Clare Moody Clare is a Unite official and is the lead candidate for Labour in the European elections in the South West. She also had a lead role in the campaign to establish the Agency Workers’ Directive.

Claude Moraes MEP Claude is a Labour Member of the for London and Deputy Leader of the European Parliamentary Labour Party (EPLP).

Photo credit for John Cryer: Peter Arkel

The views expressed in this paper do not represent the collective views of the Centre for Labour and Social Studies (Class), but only the views of the authors. The responsibility of Class is limited to approving this publication as worthy of consideration by the labour movement.

2 Can the European Union deliver for working people? Can the European Union deliver for working people?

As the European Elections approach, the media spotlight is increasingly focussing in on and, more specifically, the European Union.

On the left of the British political spectrum, the EU takes its place as the ultimate “Marmite” issue and can often be heard being discussed with equal amounts of respect and disdain. It remains revered by some as a beacon of international cooperation, with progressive principles at its heart and yet, rejected by others as an anti-democratic institution which harvests the very neoliberal agenda, those of us on the left in this country have had to fight so hard against.

In light of this, Class set out to make a weighty, yet balanced, contribution to the debate. With this in mind, we asked six key figures from across the labour and trade union movement, with differing attitudes to the EU, the same question – “Can the European Union deliver for working people?” – and have compiled their responses in this publication.

Can the European Union deliver for working people? 3 Yes, the European Union can deliver for working people

British governments have since that time been the most reluctant, and right-wing, participants in the European project. The establishment’s nostalgia for empire, and an over-inflated military policy, continued to poison social attitudes towards the EU. This has had an impact upon UK policy-making, even after joining the EU. Most European governments were seeking closer cooperation. Yet successive British governments were anxious and ambiguous about the EU, shaping the course of public opinion in the process. At the same time British governments pioneered the liberalisation and privatisation agenda. They constantly pushed for the Billy Hayes adoption of such programmes by the European Commission and European Since the onset of the great economic Parliament. For the most part, the EU was stagnation in 2008, it is clear that the more progressive on issues like employment European Union (EU) has lost its attraction rights and social legislation- embracing the for many people in Britain. Lord Ashcroft's neoliberal agenda later, and more poll of 20,000 people, in March 2014, showed reluctantly, than British governments, who a split of four in ten wishing Britain to stay in remained under the sway of US politicians the EU, and four in ten wishing Britain to and political economists. leave. One in five said they didn’t know.¹ It The crash and stagnation since 2008 seems that the public is more confused about changed that. The IMF reinforced all the Europe than ever. In these circumstances it is tendencies of the European Commission and vital that the labour and progressive European Central Bank to embrace austerity movement, defends the case for our positive as the sole solution. In these circumstances, engagement with the EU. there seem few arguments for greater This is particularly important in the UK. engagement with the EU. But addressing the Historically, up to the 1950s, British foreign extent of the economic problems requires policy was premised on keeping Europe coordinated, expansionary policies from all divided, with no single power being allowed the governments in Europe. to challenge Britain's world role. The decline There will be no sustained economic of empire led many in ruling circles to favour recovery without avoiding competitive a strategic alliance with the US as a devaluations, protectionism and national substitute. By the 1970s it was clear how this autarky. Now, more than ever, we need was failing to stem the decline of British national governments in Europe to work power and influence. closely together to solve common economic

4 Can the European Union deliver for working people? problems. economies of the BRICS countries, and the The scale of the problem is daunting. rest of the developing world. 26 million Europeans are not working, 10 Multiculturalism is a practical aid to million more than in 2008. Of these, 7.5 such engagement, where the EU’s diversity million are young people out of work, out of allows it to speak to new markets using their education, and out of training. Living own language. The racists threaten not just standards are collapsing, with 120 million national domestic harmony, but also our long Europeans living in, or at the risk of, poverty. -term economic welfare. The European TUC estimates that €250 billion In the current international political invested over 10 years would create 11 situation, it is easy to despair of social million new jobs.² Governments across being possible at all. Yet Europe could provide this as public coordination is possible across the EU both in investment, which would raise living unions and parties. It is then not too much of standards in every country. a stretch to achieve it between governments. Of course, while austerity is being Left and progressive parties in both the sustained at an EU, and a national level, such Party of European Socialists and the GUE/ solutions will not be embraced. But, arguably, NGL grouping, inside the European the dominance of neoliberalism in EU Parliament, remain focal points for institutions is in opposition to the key campaigns and policy discussions at a principles of the European Treaty. In European level. particular, the Treaty’s principles to promote The ETUC, and the various company better living conditions and social protections European Works councils, are bodies which have been ignored by the European allow unions to cooperate across national Commission in applying the deflationary borders in the EU in pursuit of more policies of the IMF and European Central expansionary economic policy, and for the Bank. specific industrial goals of unions. The contribution made by trade unions There are, and have been, many and the left parties needs to be to promote campaigns across Europe which have an alternative to austerity at both the involved activists from different countries. national and EU-wide level. Austerity is also These include, the struggle for peace and promoting an international reaction which against imperialist wars; the defence of the needs to be fought. That reaction takes the environment and for tackling climate change; form of a vicious hostility to migrant workers, and opposition to the growth of racist and and ethnic minorities– particularly Muslims fascist forces. and the Roma. This new search for Alongside these, we have seen the scapegoats runs in the opposite direction to a emergence of activists in Spain, Greece and multinational, multicultural Europe. elsewhere who stand up for those being The racist wave, to which no European impoverished by the impact of austerity. country appears immune, is not only morally Even in Britain we have some experiences of wrong in principle. It also threatens to turn the new movements such as Occupy. In the the EU, and the nation states, inwards when coming years we can expect new creative the solution to economic stagnation is found initiatives from young activists against the in a more outward looking policy. The EU’s current squeeze on living standards. There is future has to lie with the fast growing nothing to suggest that they will want to do

Can the European Union deliver for working people? 5 anything other than co-operate at an international level. The future of the EU is in the hands of the people of Europe. We can let it break up in a mass of damaged and embittered politics. Or, we can fight to defend the principle of pan-European cooperation on the decisive issues facing the peoples of Europe. Nothing is guaranteed - it all depends on the activity of people like us across the EU. If we simply allow the monopolies, arms dealers, financiers, landlords, and trans- national companies to set the agenda then the outlook is indeed bleak. But a better Europe can be forged by the left in Britain and the EU demanding change, and organising for it across the EU.

References

¹ Lord Ashcroft (2014) Europe on Trial http:// lordashcroftpolls.com/2014/03/europe-trial ² ETUC (2014) Falling wages casts doubt on recovery warn trade unions http://www.etuc.org/press/falling- wages-casts-doubt-recovery-warn-trade- unions#.UzqehGfz2M1

6 Can the European Union deliver for working people? Yes, the European Union can deliver for working people

Greece, France, Belgium and the . Here in the UK, UKIP are currently occupying the populist anti- European Union right-wing role much to the chagrin of Tory Eurosceptics who have been burning the Thatcherite flame ever since she made her 1988 Bruges speech. Within this political and economic context those who support membership of the European Union have to make their voices heard in favour of a Social Europe. The elections this May will probably be fought on domestic issues with UKIP riding high on an anti-European and anti-immigration tide. But there is much that can be said about what Europe has done for us. Trade union Clare Moody members now have more enduring rights than could have ever been achieved at a With Rupert Murdoch leading the national level. charge of a hostile Eurosceptic media it is no The UK’s membership of the EU has wonder that this has become a common also provided good quality jobs from the refrain. The constant drip, drip, drip of poison motor industry to aerospace and far wider. oozing out of the right wing press has framed Health and safety protection, often derided a debate that favours corporate interests. by the right, has been embedded into EU Get government ‘off our backs’, undo the legislation. ‘ties of regulation’, ‘free up business’, Europe Protection for maternity leave, regulates too much, the market knows best. discrimination law and equal treatment for Well, no – we have seen it doesn’t. part-time workers and paid holiday are all EU If the economic crisis, the bailing out of rights that we take for granted at our peril. the banks and the subsequent recession The value of collectivism lies at the very core taught us anything it should have been, at of trade unions and the employment rights the very least, that the ideological solutions such as Transfer of Undertakings (Protection to the failure of neo-economic liberalism of Employment) (TUPE), redundancy and have brought ordinary people to their knees, Information and Consultation regulations. and laid waste to their hopes and aspirations. These are not dry legislative rights; these are The market isn’t the solution to market rights that are crucial to our workforce. failures but that is what the right has offered. There are also issues of wider concern It is precisely these conditions and the to the trade union movement that are best harsh austerity measures that have dealt with at an EU level, in particular climate encouraged the scapegoating of migrants change and tax avoidance, neither of which leading to the rise of far right groups in respect national boundaries.

Can the European Union deliver for working people? 7 But the EU is the capitalists’ creature? Commission President should come from the National politicians take the credit for left. Now is certainly not the time to be advances at an EU level when it suits them coalescing around our opponents to and are very quick to pass the blame for denigrate and, or, campaign against anything that is perceived as unpopular. Yet membership of the EU. the simple fact is that common decision- Almost uniquely, the EU is regarded as making is done by national politicians in the a monolithic entity that has only one Council of Ministers and European politicians direction and is apolitical. It isn’t. Jacques in the European Parliament. The right has Delors and the development of the European been in the majority in both institutions for Social Model proved that. Politics determines 10 years but we have managed to hold on to policy at EU level, just as with local, devolved the protections outlined above. We should and Westminster governments. The damage not bury our heads in the sand and think that that Thatcher and right-wing politicians have these rights will still exist if we turn our backs done at the national level has not led to the on the EU. left calling for the abolition of Westminster; it Our political struggles do not stop at hasn’t even united the left behind calling for the Channel. The same political, economic proportional electoral systems. So why would and social arguments that rage within our we take these same political arguments up at country’s borders apply equally to the politics a European level? of the EU. For all progressives, changing and The diagnosis that the EU, as a whole, challenging the political direction of the right is the problem, is false. The problem is we is our ‘raison d’être’. It’s what gets us up in have not faced up to the fact that we have a the morning. political fight on at a European level just as There has rightly been much discussion much as we have a political fight on at a UK about the Transatlantic Trade and Investment level - whether this is about austerity, public Partnership and in particular the Investor- services, collective and individual rights or State Dispute Settlement part. The ISDS has climate change. now been put on hold because of pressure Why should trade unionists support the from trade unions and the Socialists and EU? Democrats in the European Parliament. The simple answer is jobs, good jobs Because the European Parliament will have a that people want and that people can rely on. say in this, the Commission has had to take a At our core as trade unionists with a step back. This is now a political fight and one belief in solidarity and collectivism, we are we have to win. driven to deliver for our members. The EU While nationalists and the far right are has done just that, giving us jobs and rights. capitalising on the misery created by the So what happens if we turn our backs on it? economic crisis, it is possible that after the All those rights become subject to the whim European Parliament elections on the 22nd of our national governments – sadly our May the left will form the largest single experience of national governments does not group. After ten years of the right running suggest that there is an alternative nirvana in Europe, the political tide may well start to the UK that will miraculously appear if we turn in our direction again- on policy and walk away from the EU. The reverse is true, with the institutions. As the largest single we walk away and we lose the guarantees we group post Lisbon Treaty, the new

8 Can the European Union deliver for working people? all get from our membership of the EU. Those rights will be eroded over time, jobs will go and we will be diminished. Where from here? None of us are happy just to stick with the status quo. We know we disagree with much of the recent direction of the EU, those disagreements are very similar to the disagreements we have with the direction of the national government. In many ways the political framework of the EU makes it easier for us to deliver advances in collective rights because they are more embedded in European models of industrial relations than in the Anglo-Saxon model. And when we achieve those advances they are more likely to become permanent at an EU level than the possibility of achieving them at a national level, exactly as we have seen with other rights that have come from the EU. If we walk away, we will play into the hands of the neoliberals that want to strip away our rights, want to ignore climate change and want to be free to avoid paying their dues to our society through taxation. Ultimately they do not care whether the UK is in or out of the EU as they will work to deliver their model at whatever governmental level. In fact, it is easier for them to do this at a national level. As trade unionists, working in the interests of our members, we cannot afford to leave the EU. We cannot turn our backs on the EU and pretend there is a hopeful alternative; our political history does not give us any grounds for this hope. It is not in the left’s nature to turn our backs on a political fight. Once we recognise this is what we are facing over the EU, we know what we have to do. The same as progressives have done throughout history - we don’t run away - we stand and fight.

Can the European Union deliver for working people? 9 Yes, the European Union can deliver for working people

begin with, and nor is it confined to, the EU. In fact, the four freedoms guaranteed by the EU – the free movement of people, goods, services and capital – mean that there are countless advantages to EU membership. With this in mind and with Britain’s place in the union under threat, it is now more important than ever for progressives to make the positive case for the EU. The economic benefits of the single market, which have historically ensured majority poll support for EU membership, are now having the opposite effect, as the economic credibility of the Eurozone suffers as a direct result of the crisis. We cannot let our arguments be Claude Moraes MEP undermined in this way. EU membership is actually worth between £31 billion and £92 The upcoming European elections billion per year to the UK economy, in terms provide the perfect opportunity for of revenue generated through trading.¹ And progressives to show exactly how the with reports suggesting that EU countries are European Union can deliver for working twice as likely to trade with other EU people across the UK. member states than they would be in the British people have directly benefited absence of a single market, it is easy to see from EU membership, reaping the rewards of how detrimental it could be to our economy economic and social successes, as the EU to withdraw. helped cement Britain’s role as a global The damage would not just be player and reassert its strength on the world confined to income gains for the national stage. economy as it is also likely that it would In spite of this, the EU, as an affect national employment levels. A recent institution, has suffered from decades of House of Commons Library report shows that denigration in the British press. The failure of 4.5 million jobs in Britain are dependent on many politicians, and other sections of British trade with the EU.² When this many jobs are society, to sufficiently defend this unique reliant on the continuation of current trade organisation needs to be addressed, agreements, the fact that politicians could particularly as the EU faces even greater even consider Britain leaving the EU in the criticism from the right as more member midst of such a precarious economic climate states join. is frankly astounding. The current global economic situation, Despite these clear economic benefits has impacted upon the EU’s legitimacy, which and the fact that it was established to rival is particularly unfair as this crisis did not the US’s status as a superpower, the EU’s

10 Can the European Union deliver for working people? mantra has never been profit at any cost. In that the EU, as a collective, has been fact, its founding aim of achieving a collective instrumental in leading the charge against economic prosperity that does not detract climate change. In 2004, the Kyoto Protocol from the rights of citizens in the member set much-needed targets for member states states, means that workers’ rights are the to reduce their carbon emissions – targets ultimate priority. which are being met. The European Many of our basic rights at work are Commission is continuing to build policy protected by EU legislation, which set frameworks towards a sustainable and highly international minimum standards. Workers' efficient long-term energy profile for all of rights to health and safety, paid holidays, the member states in the European Union, maternity and paternity leave, equal pay and regardless of when they joined. This protection against discrimination are just establishment of a successful, common some ways in which the EU has delivered energy policy to cope with all the challenges vital legislation to secure and safeguard facing energy use shows the power of working people’s rights. The Working Time collective agreements and collective action – Directive is a key example of this. Six million something at the heart of the EU. UK workers have directly benefited from In spite of this evidence, recent crises improved holiday entitlements arising from have opened the way for greater acceptance this alone³ – something we must not take for of Eurosceptic attacks on the EU. granted. Unfortunately, these attacks are increasingly EU rights, like the EU itself, deserve the resonating with the public in the absence of determined support of British working people an adequate defence by progressives. and are a cause worth fighting for. If Britain In light of this, it is easy to see why the leaves the EU, then it leaves behind this level European Elections in May and the General of protection for workers. And after Election next year mean that, in the witnessing the extent of recent Tory attacks immediate future, we will witness the most on our rights at work here in the UK, we pivotal period in the history of our really cannot take any chances on losing the membership. safety net that European legislation provides. We have let Eurosceptics frame The EU is also often accused of being a discussions on EU membership for far too vehicle to facilitate conservative policies. In long and now we must reclaim the debate. reality, this could not be further from the This is the perfect opportunity for us to truth. We often look to the EU, and its discuss the type of EU, we want to belong to member states, for progressive alternatives – a Social Europe that delivers for working in tackling complex issues. For example, people. when Labour discusses new policy on Progressives who have benefited from technical training, the living wage and the EU – trade unions, British industry, civil rebalancing our economy away from financial society, NGOs, the voluntary sector and the services towards engineering, we are talking arts – will all need to say what has been about German social democratic models. delivered, what can be lost and crucially, how When we talk about improving transport we can move forward together. We must infrastructure and railways, we look to the recognise the EU to be a unifying progressive French TGV system. force as, in so many ways, that is what it Equally, it is no exaggeration to say represents.

Can the European Union deliver for working people? 11 References

¹ Full Fact (2013) Is EU membership worth £3,500 per household? https://fullfact.org/factchecks/ is_eu_membership_worth_3500_per_household-28944 ² House of Commons Library (2013) In brief: UK-EU economic relations – key statistics. Standard Note: SN/ EP/6091 available online at http://www.parliament.uk/ business/publications/research/briefing-papers/ SN06091/in-brief-ukeu-economic-relations-key- statistics ³ TUC (2013) Hazards at Work: organising for safe and healthy workplaces - 2013 edition. Excerpt with statistic referenced available online at http://www.tuc.org.uk/ workplace-issues-38

12 Can the European Union deliver for working people? No, the European Union cannot deliver for working people

have often been used by governments for their own ends. However, if parliament decides to change the power of the ballot box and the power of Westminster, that should be put to the voters. Since the last referendum – held by a Labour government in 1975 – we have had an army of treaties march out of Brussels, often containing profound changes. The Single European Act, Nice, Lisbon, Maastricht, Amsterdam and the Growth and Stability Pact to name just a few. They have certainly changed parliament’s powers substantially but the voters have never been consulted. Political parties tend to be very shy when it comes to discussing the EU and that shyness increases John Cryer MP as general elections loom. Cameron is promising a referendum in The debate in Britain about the 2017 or 2018 and, in the meantime, he claims, European Union is very rarely conducted in the Conservatives will renegotiate our EU terms that are rational or objective– and I membership. If that were to be a genuine have to say that applies to both sides. If I renegotiation, we might expect some were to offer criticisms of the EU I would, and democratic control to be returned to have been, accused of being a stupid, narrow migration, fisheries and agriculture just for a -minded nationalist. On the other hand, start. That will not happen. The Prime Minister anyone who defends the European Union can hopes that he can repeat ’s expect to be condemned as treacherously sleight of hand of 1975. Wilson claimed to selling out hundreds of years of democracy. have extracted major concessions from what The reality is a great deal more complicated was then the Common Market. By the time than that but the same reality has led me to everyone realised that our relationship with come to the conclusion that the EU cannot Brussels was virtually unchanged, the deliver for working people because it is, as far referendum had been won by the “yes” as I can see, an exclusive club which all too campaign. often functions as the protector of big banks Now, this sort of sleazy and dishonest and big business with scant regard for anyone manoeuvring is pretty typical of a government else. which has made mendacity an everyday Along with a majority of the British practice. Although it has to be admitted that it people, I think an in-out referendum on our is difficult to think of any British government membership is long overdue. That is not that has been marked by honesty on European because I am a fan of referenda. In fact, I am matters. That includes Thatcher, by the way, pretty suspicious of the way such plebiscites who handed over the largest slice of

Can the European Union deliver for working people? 13 sovereignty through the Single European Act of sovereignty” and “centralisation” being an in 1986 but neglected to mention this to the inevitable consequence of the single voters. currency. The EU is far from democratic and, Many people in Italy or Spain or because of this, will never deliver for working Greece must be wondering whether their people. We need to reassert the principles of long and often painful battles for democracy democracy and that is why I want to see the were worth all the bother. Labour Party commit itself to a referendum Some readers may point to legislation at the earliest opportunity without any guff protecting workers’ which came from the about “renegotiation”. And our referendum European Union. And there is some truth in Bill should be put through parliament, as a that. But most of the major legislative government Bill and in government time, as changes – such as automatic recognition and soon as we are able to get into power. It the minimum wage enacted by the Blair seems to me that there is no way we can go government or the Health and Safety at Work into the next election without promising the Act introduced by Wilson – did not come people a choice. from Brussels. While ministers are desperately using At the same time, the European Court subterfuges at home to convince us all that of Justice persistently rules on the side of big they really are enthusiasts for a referendum, business. The classic examples were the that is mild compared to their outrageous rulings in the Viking and Laval cases, which behaviour toward the Eurozone countries. effectively meant that workers are forbidden Even in the recent history of the EU we have from taking collective action against cases of seen austerity measures forced on working social dumping. people in all of the member states. After Make no mistake, the European Union seeing the devastating impact this has had on is no friend of working people and never has their lives, how can anyone possible argue been. That is why a great many coalition that the EU is on their side? ministers actually have little difficulty in going And if that wasn’t enough, all of those along with the direction of the EU. They know states are now being told that they will lose it shares many of their aims. control over their own budgets; they have The great Tory prime minister, already, of course, lost control of their Benjamin Disraeli once described the currency by joining the Euro in the first place. Conservative Party as the party of organised Brussels is also indicating that there should hypocrisy. It is now changing into the party of be more “harmonising” of taxation. disorganised hypocrisy but on this issue Now, if all that power and control goes ministers are likely to remain pretty much to the European Central Bank and the united as they continue to go along with the European Commission, what the hell is the aims and wishes of big business, big banks point in voting when the governments of the and the Euro-sadists who don’t mind if Eurozone nations will have the power of a working people suffer as long as the single parish council? currency and the rest of their agenda is And what have British ministers got to protected. say about the greatest loss of democracy in It’s our job stand up for ordinary Europe in living memory? Sod all. Apart from people and to give them a genuine say in to mutter a few platitudes about the “pooling their future.

14 Can the European Union deliver for working people? No, the European Union cannot deliver for working people

TUPE transfer rights emanated from Europe. These were individual-based rights aimed at providing a floor below which no worker was meant to fall. They offered a safety net to workers during the Thatcher onslaught. But at the same time as these ‘sweets’ were being handed out, a neoliberal coup was taking place. A free market ideology was invading Europe and embedding itself into the DNA of European institutions and Treaties. Thatcher and Reagan began the process, but it has accelerated ever since. With our hands firmly wedged in the sweetie jar and our rose-tinted glasses blinding us to reality, we failed to monitor, let alone prevent, this invasion. Carolyn Jones The end result is a European Union that has, at its heart, institutions and rules The EU is a neoliberal prison. The governed by an ideology that favours finance vision of Europe as the provider of rights and capital over workers’ rights. The free market the protector of freedoms has been philosophy is now locked in to the very core consistently eroded. In its place people see of the Europe Union. And as Lord the reality: a ‘free market’ system imposing a Wedderburn warned during negotiation of political ideology through a series of the Lisbon Treaty in 2007, the ‘primacy European institutions– the Court, the doctrine’ (whereby all decisions of member Commission and the Troika. states are subject to the law of the European And people don’t like what they see. Court) has been built into the Treaty and is Unfortunately (but not unexpectedly) anger now irreversible. at the EU is too often expressed in In this new world order, it is rare to see protectionist terms or racist rants. For the the introduction of any new, effective rights good of us all, that needs to change. As a for workers. Instead, emphasis is on movement we need to expose the true removing so called “red tape” from SME’s nature of the beast and offer a progressive and promoting “flexicurity” via labour market alternative. reforms. The Agency Workers Directive was EU: the provider of rights? presented as helpful but, in fact, has led to a massive increase across Europe in the It is true that, during a specific period number of workers employed through of time, the EU provided UK workers with a agencies without the full rights of directly range of employment rights denied to them employed workers. The Directive has at home. Much of the equality legislation, effectively normalised and institutionalised working time and holiday regulations and casualised labour.

Can the European Union deliver for working people? 15 EU: three turns of the neoliberal key simply seen as adversely affecting the Not only are there few new rights in freedom to conduct a business. this neoliberal prison, we now see existing The Commission rights undermined in three significant ways. Second, under the terms of the 2011 The Court Euro Plus Pact, the EU Commission has now First, decisions of the Court of Justice turned its attention to dismantling the of the European Union increasingly reflect institutions and structures supporting the primacy granted in the new collective bargaining across Europe. A report Constitutional Treaty to the freedoms of prepared by the European Commission in companies over the freedoms of workers. 2012 lists ‘employment friendly reforms’ as The four freedoms awarded to companies - including the ‘general decentralisation of to provide services, establish business, move wage setting and collective bargaining, wider scope for opportunities to derogate from capital and move labour from one member state to another - now trump all other rights, industry-level agreements at workplace level most notably rights of workers. Goodbye and an overall reduction in the wage-setting Delors’s ‘social market’ model. Hello power of trade unions’. The EU Free Trade Thatcher’s free market model. Strong labour Agreement currently being negotiated with laws are now seen, not as a necessary the US threatens to open all remaining areas rebalance of workplace power relations, but of public provision to corporate challenge. as a distortion of competition. These attacks at EU level again Article 16 of the Charter of undermine the post-80s Social Europe Fundamental Rights of the EU is a good settlement, threatening long established traditions of strong collective bargaining in example. This guarantees bosses the right to conduct a business in what is called an EU member states. Even the ETUC, not ‘undistorted labour market’ - for normally a critic of Europe, condemned these ‘undistorted’ read free of collective attacks on collective bargaining, saying it was bargaining constraint. Employers are now leading Europe to a ‘dead end’. free to ‘post’ workers from low-wage EU The Troika States to high-wage States, ignore collectively Third, the EU Commission, the agreed terms and instead provide only the European Central Bank and the IMF (the low wages payable in the home country. And Troika), are using Economic Governance rules the Court willingly obliges. introduced in the EU in 2012 to enforce Attempts by unions to protest against severe austerity measures on nation states. this race to the bottom (as in the Viking and Under the rules, Britain, like all other EU Laval cases) have been declared unlawful by member states, is obliged to reduce its public the Court. Similarly, European level union sector deficit and is doing so by reducing attempts to strengthen the protection benefit entitlement, cutting pensions and offered to posted workers (and by extension keeping public sector wages low. the terms and conditions of UK workers) have The 2012 Treaty gives the EU fallen on deaf ears. In truth, protections for Commission powers of supervision over the posted workers – as with most employment budgets of member states, including tax rights and trade union freedoms - are now policies and borrowing. Failure of the UK to

16 Can the European Union deliver for working people? comply with the terms of the Stability Treaty by 2018 risks the imposition of unelected and unaccountable technocrats – as already seen in Greece and Italy. Of course Cameron and Osborne are only too willing to comply, and have grasped the austerity agenda with both hands. But what of a future Labour Government? Are we to be denied the right to determine our own national laws or decide our own economic path? Yes, if we remain within the current constraints of the EU. Keynesian policies of growth will forever be rejected in favour of free-market, trickledown economics. The door of the neoliberal prison has been firmly closed. We must see the EU for what it is – an institutionalised mechanism for imposing ‘free-market’, neoliberal policies across its 27 member States. It has become a disaster for individual and collective rights at work and the living standards of millions of workers. Democratic control over our future economy will be lost – while Troika-imposed policies in Southern and Eastern Europe are causing unsustainable levels of labour migration. The Labour Movement and the Left has to recognise these realities and develop alternative perspectives for economic cooperation, on democratic lines, along with trade union colleagues elsewhere in Europe. To do otherwise is to surrender to the right- wing – whether Cameron and the City of London bankers, or xenophobes like UKIP. We need to regain the right to assert our needs collectively, through our unions, and democratically, through our Parliaments. In short – we must break the EU prison chains that bind us.

Can the European Union deliver for working people? 17 No, the European Union cannot deliver for working people

standards continued to stagnate, while levels of in-work poverty rose. In spite of this, there was a pan-EU failure to try to ensure that working people actually benefited from the recovery, or to turn to radical solutions to tackle inequality – or even to act when it became clear that austerity wasn’t working. As a result of this, it seems that the sort of policy agenda that might seek to create sustainable economic development within any single member state would be at odds with the EU’s policy agenda and approach. The starkest example of this has, of course, been the single currency project. To date, the UK has remained outside this, but it is worth considering briefly for two Jonathan Michie main reasons. Firstly, because there are plenty in Britain who have advocated – and It is difficult to imagine how the still do advocate– membership of the single European Union ‘project’ might deliver for currency area, and secondly, because the working people under the terms currently single currency and its rules have implications constituted by the EU, since it has historically for the economic and political trajectory of been dominated by a rather pro-business the EU, which is largely tied to the euro policy agenda, operating within the straight- project. In fact, the single currency is likely to jacket of economic orthodoxy. This remains result in recurring economic problems and true today, as economic recession holds back dislocations across the Eurozone, which will many of the EU member states, and yet no almost inevitably impact negatively on the EU serious anti-recession economic and as a whole – the UK included. industrial policies have been adopted at a The economic impact of a single European level. Instead, the European currency Central Bank remains stuck in old-style orthodoxy, and the necessary European-wide If the 2008 financial crisis taught us Green New Deal has not been properly anything it was that the banks aren’t developed or pursued. delivering for working people. We witnessed, The scale of the current economic crisis first-hand, the urgent need for a radical should have provided a catalyst moment alternative to current banking systems, on a where leaders and politicians across the EU global scale. It was a definite case of actions realised that serious action was required. speaking louder than words as the message Even as it is was announced that several of was delivered much more starkly than it the member states, including the UK, were could have been by any politician or beginning to see economic recovery, living economist. However, the debate quickly

18 Can the European Union deliver for working people? centred around how systems should be uncompetitive, this will lead to that country’s reformed. This proved complex. But certainly currency being devalued, so that their goods the adoption of the euro would not be the and services become more competitive. This answer. results in the demand for those goods and The reality is that for a single currency services rising, with output and employment to make sense requires a degree of political thereby picking up, and so on. and economic integration. The single The euro falls between the two. Having currency requires a single monetary policy for abandoned their own currencies, the option the area in question. There should therefore of realigning currencies is lost. But a single also be a single fiscal policy, a single industrial currency has been adopted without the policy, and so on. This is lacking in the EU. development of the necessary degree of Why then, did EU leaders go ahead with the economic integration, and without the single currency idea, in the absence of the necessary accompanying single fiscal, necessary conditions? The answer is that regional and industrial policies. All this means those driving the agenda have been – and that the EU is likely to continually be faced remain - wedded to an orthodox view with these economic problems of depression whereby the economy is thought to operate and stagnation, with the normal policy according to textbook models, which is a far measures no longer available. Britain thus cry from reality. It is the sort of fantasy world suffers from being part of this incoherent that the economist John Maynard Keynes construct, despite not having adopted the described as being one where nothing very euro. The fact that the euro area is consigned serious ever happens. In which case, of to adopting a single interest rate, for course, reckless economic gambles such as example, despite the reality that this rate adopting the euro will have little negative may be quite inappropriate for some of the consequence. member countries, will create economic But with a single currency imposed, dislocations that will impact negatively on the when one part of the single currency area EU as a whole – the UK included. becomes economically uncompetitive for Economic policy action whatever reason – perhaps just because it is not as economically dynamic and successful Of course, Britain operates within a as the rest of the area – problems ensue. In global economy, and needs to face the most single currency areas – namely, economic realities of this, which includes the countries – the problem is dealt with in part importance of the European Union, and the through automatic fiscal transfers: those in importance of the individual EU member the area doing less well will tend to pay less states for Britain’s trade and other economic taxes, and at the same time will tend to relations. But equally, local and regional receive more benefits (unemployment pay, economies within Britain play an important housing allowances, etc). This means there role, and policy action should seek to foster will be an automatic net inflow of resources economic activity at this level. The desired into the area that is lagging. In addition, there policies for Britain to pursue may fall foul of will usually be active regional and industrial EU membership – as might be the case with policies aimed at tackling the problem. the active use of public ownership, for Conversely, if countries have their own example. In addition to this focus on the currencies and one economy becomes local, Britain should be developing

Can the European Union deliver for working people? 19 appropriate economic relations with countries from across the globe, not just with EU member states, and the restrictions of EU membership will not necessarily be helpful in this regard. Even before the single currency project, the Maastricht agreement was based on pre-Keynesian attitudes towards preventing active fiscal policy. Its requirements on governments to target specified fiscal deficit and cumulative debt levels, irrespective of the state of the economic cycle – that is of whether the economy is in recession or not. In the extreme, an economy in recession may be forced to cut government spending, thus exacerbating the recession– which in turn may lead to a higher deficit rather than the required reduction. Thus, in its current form, the EU struggles to deliver for working people. The UK economy is not performing and we need radical changes to ensure that working people benefit from any recovery. The ties forged by the EU mean that just as Britain’s economy is affected by Eurozone activities, the policies it can adopt are also inextricably linked to those of other EU political leaders. Britain should be developing and pursuing a real ‘Green New Deal’ to create sustainable economic development, including the active use of public ownership and public procurement, much of which would likely fall foul of the EU’s free market ethos. Nevertheless, this is the best course for the British economy. If the EU presents a barrier, we ultimately need to be prepared to pursue such policies in spite of – and in the face of – the economic orthodoxy that continues to pervade the EU.

20 Can the European Union deliver for working people? The Centre for Labour and Social Studies (Class) is a new think tank established in 2012 to act as a centre for left debate and discussion. Originating in the labour movement, Class works with a broad coalition of supporters, academics and experts to develop and advance alternative policies for today.

128 Theobalds Road, London WC1X 8TN Email: [email protected] Phone: 020 7611 2569 Website: www.classonline.org.uk

The views, policy proposals and comments in this think piece do not represent the collective views of Class but only the views of the authors. © Class 2014